Comstock Mining Claims Bonanza as Residents Rise Up in Opposition

Virginia City – (Serious Speculator – 5/23/2011) Comstock Mining, Inc’s (OTCBB: LODE) plans for long-term mining at the scene of one of the world’s greatest gold and silver bonanzas have raised concerns from neighbors.

A citizen’s group calling itself the Comstock Residents Association has formed to fight Comstock Mining Inc.’s plans to mine for gold and silver near the historic town of Virginia City over the next 30 years, the Reno Gazette-Journal reported.

To date, Comstock Mining has acquired property and mining claims encompassing about 6,100 acres from Virginia City to Dayton, including, most notably, historic Gold Hill and Silver City.

Corrado De Gasperis, Comstock Mining’s CEO, said test drilling has identified deposits of gold and silver worth more than $2 billion, and claims the mining operations will provide jobs and a boost to the local economy. “We’re hitting tremendous amounts of gold and silver. We’re hitting bonanza grade,” De Gasperis said, “We’re going to mine.”

But opponents say the company’s open-pit mines will destroy a quiet rural lifestyle and forever alter one of the West’s most historic places. “We’re not opposed to mining. We’re opposed to pit mining in the historic district,” said David Toll, an author and organizer of the Comstock Residents Association. “This is a National Historic Landmark. It belongs to everybody.”

The landmark commemorates one of the world’s greatest bonanzas ever: a massive, underground pocket of silver and gold around Virginia City known as the “Comstock Lode”, about 20 miles southeast of Reno. Discovered in 1859, the lode has yielded a total of about 9 million ounces of gold and 220 million ounces of silver, worth about $12 billion in today’s prices.

With most needed state and county permits already secured, Comstock Mining hopes to start digging at a 180-acre site south of Gold Hill late this summer. The pit mine there is expected to be about 30 acres in size and between 300 and 450 feet deep.

The company also is considering another pit mine at an 88-acre site just outside Silver City, a town of about 200. Residents fear heavy truck traffic and mining activity will ruin the area’s charm.

“It would destroy this community,” 30-year resident Darlene Cobbey told the Gazette-Journal. “Open-pit mining does not belong in a residential community.”

Comstock Mining officials said they will work to minimize impacts to residents, including routing truck traffic away from neighborhoods. Still, they acknowledged mining operations would affect residents.

“There’s no mining activity that won’t have some level of disruption,” De Gasperis said. “Some people don’t want to live that close to this kind of activity. We understand that. That’s why we’ve been up front and transparent.”

Reclaiming disturbed areas both from the company’s mining as well as historic mining done by others will be a top priority, he added. De Gasperis said the company’s primary investor, John V. Winfield, is “environmentally conscious and socially responsible.” Winfield’s company, InterGroup Corp. Inc., owns the San Francisco Hilton.

On June 2, at 6 pm Comstock Mining, Inc will apply to the Storey County Planning Board for a Special Use Permit to allow five years of drilling all the way up Gold Canyon and under Virginia City. He also said that “notices have just gone out to property owners and people are waking up. It will be a HUGE meeting, the first real battle in an official arena.”

While history suggests that corporations and government regularly run over citizens when money is concerned, there is a lot riding on the permitting process. In order to generate the desired revenues, Comstock Mining must necessarily disrupt lives and gut the landscape and citizens have to hope that Comstock Mining is more faithful in living up to their custodial responsibilities when it comes to reclamation than many noteworthy public companies in the past.

With this much at stake, we still like the view from the sidelines but day traders can have a blast with the liquidity and volatility.

Disclosure: We do not have any equity interest in Comstock Mining, Inc stock or the company nor were we compensated in any way to write this article.